The United States dollar is experiencing a rebound at the start of European trading on Friday (May 16, 2025), following a period of recent pressure. As previously highlighted in the Macro Overview, various economic data from the US, particularly inflation indicators such as the consumer price index (CPI) and producer price index (PPI), are showing a slowdown in growth for April, which has influenced market movements—particularly impacting the US dollar.
Tonight’s trading will be shaped by the release of data from the United States. Here are the key economic indicators from Trading Central:
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- US housing starts (month-on-month/April); forecast -1% compared to the previous -11.4%
- US building permits (month-on-month/April); forecast -1.2% compared to the prior 0.5%
- US consumer sentiment (preliminary/May); forecast 52.5 compared to the last 52.2
GOLD
The increase in the US dollar has pressured Gold (XAUUSD), which has fallen to $3,169.02 per troy ounce. This marks a decline of more than $70 or 700 pips from Thursday’s close.
Gold has faced downward pressure due to improved market sentiment following the announcement of a trade deal, President Trump’s plans to lift sanctions on Syria, and the potential for an agreement regarding US-Iran nuclear negotiations.
The positive sentiment has encouraged traders to shift towards riskier assets with higher returns, as evidenced by the rise in US stock indices. Gold, typically viewed as a safe haven asset, has consequently lost some of its appeal and is experiencing downward momentum.
The pressures on Gold could increase further if tonight’s economic data from the US exceeds expectations.
OIL
Oil prices (CLS10) have shown volatility within a range of $61.23 – $62.32 per barrel at the beginning of the European session. Oil prices are under pressure following President Trump’s remarks about the potential for a nuclear deal with Iran.
If such an agreement is reached, sanctions on Iranian oil may be lifted, allowing Iran to resume exporting, which would increase global supplies. This development creates a negative sentiment surrounding Oil that will likely continue to be felt in tonight’s trading.
EURUSD
The EURUSD pair has retracted its gains at the outset of European trading after rising to 1.12198. This movement indicates the strengthening of the US dollar, and if tonight’s US economic data surpasses forecasts, the greenback could gain further strength and put pressure on EURUSD.
GBPUSD
The GBPUSD currency pair has reversed its upward trend to 1.32840 at the start of Europe’s trading session, after having reached 1.33325 earlier. This decline follows a notable increase yesterday, likely due to profit-taking ahead of the weekend.
The weekend may bring events that could trigger significant movements come Monday. Profit-taking may continue in tonight’s trading if the US economic data is reported higher than anticipated.
USDJPY
The USDJPY pair has trimmed its losses at the beginning of the European trading session, after touching a daily low of 144.917. The rebound for USDJPY likely results from traders closing their sell positions prior to the weekend, following a steep decline of 270 pips over three days.
This trend could continue into tonight’s trading if US economic data comes in stronger than expected.
Nasdaq
The Nasdaq composite index has risen at the start of European trading, hitting a daily high of 21,447. The Nasdaq is nearing its peak level since late February, marking a return to a bullish market.
The US-China trade deal, coupled with President Trump’s executive order aimed at lowering drug prices, has bolstered positive sentiment for the Nasdaq. Further upward momentum for the Nasdaq may occur if tonight’s US economic data exceeds forecasts.
